COX STARTS
TEST RUN OF
STREAMING WEB VIDEO

Nearly 100 channels offered in Orange County trial run

Is Cox Communications taking an “if you can’t beat ’em, join ’em” stance in its battle with Netflix, Hulu and other Internet video competitors?

The Atlanta-based cable company — which is San Diego’s largest cable provider — has begun testing a streaming Internet video service in Orange County.

Called FlareWatch, it allows Cox high-speed Internet customers who buy a $99 Fan TV box to subscribe to nearly 100 channels of streaming stations for $40 a month.

That’s significantly less than the average cable TV video bill of $64 a month, according to industry research firm IHS.

Today, most cable operators let customers watch shows delivered over the Internet on computers, iPads and smartphones. But they must have a cable TV video subscription to do it.

Cox is the first cable company to experiment with an Internet streaming service that’s not tied to a cable TV package, said Erik Brannon, an IHS analyst. Subscribers only need a Cox high-speed Internet connection.

A Cox executive stressed that the trial doesn’t mean the company intends to roll out a Netflix-like over-the-top video service.

“It’s a trial. It’s limited to Orange County, and it’s just an example of Cox exploring innovation in a number of different platforms,” said Suzanne Schlundt, a marketing vice president for Cox.

Still, the move highlights how cable companies are looking for ways to stop customers from cutting the cable cord.

Cable operators have been shedding subscribers in recent years. While some industry analysts blame the weak economy, others say more households are opting for Internet video.

The industry has responded by offering more services — such as whole-home DVR and personalized television. Earlier this month, Cox rolled out Contour, a channel guide and recommendation engine. Contour makes suggestions based on individual viewing habits. It launched nationwide Aug. 5.

“There is just so much content available and people have (a) limited amount of time to explore,” Schlundt said. “They are looking for a personalized video experience. No other provider offers personalized recommendations for up to eight user profiles.”

Pay-TV household penetration is expected to drop from 86 percent today to 81 percent in 2017, according to IHS. That decline will be lead by “cord nevers,” 20-somethings accustomed to watching online video.

“These types of services may be successful for the cable operators,” Brannon said. “But the accomplishment may come at the cost of significant reductions in (profit) margins.”

It also positions cable firms to battle technology companies such as Sony, Google and Apple, which are reportedly vying to launch Internet subscription TV services.

The Wall Street Journal reported Friday that Sony has reached a preliminary deal with Viacom — which owns Nickelodeon, Comedy Central and other channels — to carry its content on a Sony pay-TV service.